7 Tips to Help You Prepare for Tax Season - NYCM Insurance Blog

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Feb 3, 2023

7 Tips to Help You Prepare for Tax Season

Tax season will be here before we know it and it’s time to start prepping. While you’re probably excited about receiving your tax refund, it’s also common to feel anxious about the actual filing process. Because most of us do not work in the financial realm on a day-to-day basis, dealing with taxes can sometimes feel like a stressful experience.

To help you prepare ahead of time, we’ve compiled the following tips to help you enter tax season with confidence.

Decide who will prepare and file your taxes

First things first: figure out how you will be filing your taxes this year. Will you be using a service or financial professional, or will you be filing your own taxes? If you experienced a major life change over the past year such as a marriage, divorce or the start-up of your own business, then your taxes may be more complicated than in years past. If this is the case, you may want to consult with a professional for help filing.

Learn from previous years

Think back - what have you learned from previous years? Were there things you had difficulties or setbacks with? Were there things that went well? Make note of what you would like to do differently this year and what practices you would like to keep.

Gather your documents

One of the best ways to prepare for tax season is taking the time to gather up all the documents you - or your CPA - will need when it comes time to file. Some of the documents you will need include a W-2 if you are employed, your social security card or tax ID number, childcare records and deduction records. For a comprehensive document checklist, click here.

Make note of deductions

Tax deductions lower a person’s tax liability by lowering their taxable income. Some examples of deductions include healthcare costs, property taxes, mortgage interest, and some job-related expenses. 

Protect yourself from scams and fraud

You’re looking forward to that tax refund - make sure you receive it by protecting yourself from criminals. Because most taxes are filed online, the best way to protect yourself from cyber criminals is by practicing safe computing:

       Never share private financial information over public Wi-Fi networks.
       Be wary of phishing attempts. If an email from your tax professional prompts you for sensitive information, give them a call to make sure the email is legitimate and not a hacker.
       Ask your tax professional about their security practices before beginning your tax filing.

Take advantage of resources

The great thing about the world wide web is that there are countless resources at our fingertips for all different topics, including your tax return. Here are some of our favorite resources:

Who better to seek advice from than the Internal Revenue Service (IRS) itself? Check out their Interactive Tax Assistant before filing your taxes to help answer some of your questions.

If you earn less than $56,000 annually, speak limited English or have disabilities, then you may be eligible to use the Volunteer Income Tax Assistance program which offers free assistance from IRS-certified volunteers.

People who are 50 years of age or older who cannot afford a professional tax preparer are able to take advantage of the AARP Foundation’s Tax-Aide.

Plan for the refund

Last but not least, don’t forget to plan for your refund! An extra surplus of money is a great opportunity to pay off debt, put a lump sum towards a down payment on a home or vehicle or save for the future. If you’re planning to receive a refund, then making plans ahead of time will help you commit to using the money in the most beneficial way possible. Having a plan in place will make it less tempting to carelessly spend the tax refund once you have it in hand.